Correlation Between RBC Bearings and Lucas GC
Can any of the company-specific risk be diversified away by investing in both RBC Bearings and Lucas GC at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining RBC Bearings and Lucas GC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RBC Bearings Incorporated and Lucas GC Limited, you can compare the effects of market volatilities on RBC Bearings and Lucas GC and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in RBC Bearings with a short position of Lucas GC. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Bearings and Lucas GC.
Diversification Opportunities for RBC Bearings and Lucas GC
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between RBC and Lucas is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding RBC Bearings Incorporated and Lucas GC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucas GC Limited and RBC Bearings is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on RBC Bearings Incorporated are associated (or correlated) with Lucas GC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lucas GC Limited has no effect on the direction of RBC Bearings i.e., RBC Bearings and Lucas GC go up and down completely randomly.
Pair Corralation between RBC Bearings and Lucas GC
Considering the 90-day investment horizon RBC Bearings Incorporated is expected to generate 0.24 times more return on investment than Lucas GC. However, RBC Bearings Incorporated is 4.24 times less risky than Lucas GC. It trades about 0.06 of its potential returns per unit of risk. Lucas GC Limited is currently generating about -0.01 per unit of risk. If you would invest 33,966 in RBC Bearings Incorporated on November 27, 2024 and sell it today you would earn a total of 1,790 from holding RBC Bearings Incorporated or generate 5.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RBC Bearings Incorporated vs. Lucas GC Limited
Performance |
| Timeline |
| RBC Bearings |
| Lucas GC Limited |
RBC Bearings and Lucas GC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RBC Bearings and Lucas GC
The main advantage of trading using opposite RBC Bearings and Lucas GC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC Bearings position performs unexpectedly, Lucas GC can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Lucas GC will offset losses from the drop in Lucas GC's long position.| RBC Bearings vs. Lincoln Electric Holdings | RBC Bearings vs. Kennametal | RBC Bearings vs. Toro Co | RBC Bearings vs. Snap On |
| Lucas GC vs. Air Lease | Lucas GC vs. Mesa Air Group | Lucas GC vs. Rocky Brands | Lucas GC vs. InfuSystems Holdings |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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